MOSCOW, March 6 (RAPSI) – The Russian Supreme Court’s board for economic disputes will review a lower court’s ruling to recover assets from persons that were in control of Dalnaya Step, a company believed to be formerly under the control of William Browder’s Hermitage Capital Management, the court documents read.
Appeals against the ruling in question were filed by an acting manager of Dalnaya Step and HSBC Bank (RR). According to the Supreme Court, arguments presented by the parties have merit and should be transferred for review to a specialized board.
In June 2017, an acting manager of Dalnaya Step filed a claim to collect funds totaling to 1.8 billion rubles (about $31 million) from HSBC Management (Guernsey) and HSBC Bank (RR), who were formerly in control of it. In August of that year, the Commercial Court of the Republic of Kalmykia granted the lawsuit.
The Sixteenth Commercial Court of Appeals upheld the ruling in October. However, in November, the North Caucasus District Commercial Court reduced the amount to be collected from the defendants in favor of Dalnaya Step by $255,500 and £1,800,000 respectively.
On March 21, 2016, the court ruled to resume bankruptcy proceedings with regard to Dalnaya Step. According to an acting manager back then, proceedings were still in effect and there was a need to make former controllers of the company accountable.
In 2015, the department of Russia’s Federal Tax Service (FTS) for the Republic of Kalmykia filed a motion with the court to declare void a decision made in October 2007 to complete the liquidation of Dalnaya Step. The FTS department said the reason for the petition is that Russia’s Interior Ministry is investigating Alexander Dolzhenko, former bankruptcy management at Dalnaya Step, on suspicion of premeditated bankruptcy.
On December 29, the Tverskoy District Court of Moscow passed the sentence on Browder and his business partner Ivan Cherkasov in absentia for deliberate bankruptcy and tax evasion. Browder was sentenced to 9 years in prison and Cherkasov received 8 years in prison. The defendants were also fined 200,000 rubles (about $3,500) each. Moreover, the court granted a civil lawsuit and recovered 4.3 billion rubles (about $75 million) from the defendants in favor of the Russian Federation.
Prosecutors claimed that the defendants caused damage estimated at over 4 billion rubles.
In 2013, a Russian court sentenced Browder in absentia to 9 years in a penal colony. The court found that between 1997 and 2002, Hermitage Capital auditor Sergey Magnitsky created and applied an illegal tax evasion scheme in the interests of Browder.
Magnitsky worked for Firestone Duncan and represented Hermitage Capital, which the Russian authorities accused of tax evasion. Magnitsky was arrested on fraud charges in November 2008 and found dead in a Moscow detention center in November 2009. The lawyer’s death provoked an international outcry.
In July 2013, Moscow’s Tverskoy District Court found Magnitsky guilty of tax evasion and closed the case due to his death. According to the case materials, Magnitsky’s and Hermitage Capital director William Browder’s actions cost Russia over 500 million rubles (over $8 million).